Reuters: Australia's NSW State to Curb Gas Exploration, Set New Rules for Coal Seams

The government of New South Wales said on Thursday it would limit gas exploration across Australia's most populous state and set out new rules for coal seam gas developments while trying to avert a looming gas shortage.

Businesses have been clamouring for more gas development in New South Wales as nearby states that provide most of NSW's supplies prepare to export liquefied natural gas from 2015, a shift expected to double local gas prices.

But farmers and green groups have battled against more drilling in New South Wales amid worries about potential damage to water supplies from chemicals used in hydraulic fracturing to extract gas from coal seams.

To address their concerns, the government said it would adopt guidelines recommended by the state's chief scientist, who said in a recent study coal seam gas could be developed safely. MORE